Aviation flies into negative growth zone

NEW DELHI: For the first time since 9/11, air traffic in India is headed for negative growth for the full year.

According to industry experts, the January-March quarter of this fiscal could be the worst for airlines with air traffic expected to fall by up to 15%. That would bring the overall growth during this year to negative territory. Till this September, air traffic grew at 0.7%, with airlines flying 31.5 million passengers.

���The fourth quarter of the current fiscal will be the worst negative in terms of demand. Air traffic may dip 8-10% during the October-December period. The sharp fall in oil prices has been the saviour for airlines, but the severe fall in demand has failed to offset the benefit,��� Centre for Asia Pacific Aviation (CAPA) India head Kapil Kaul said. ���Our estimate is that the oil price would have to fall at least by 20% to really have an immediate impact on the sector,��� he added.

Hit by high aviation turbine fuel (ATF) prices and the financial sector meltdown, domestic air traffic plummeted to an 18% negative growth this September, the fourth consecutive month of decline since June. Domestic carriers, which together lost nearly $1 billion in 2007-08, are expected to double the losses during this fiscal, mainly on account of high jet fuel prices, excess capacity, predatory pricing and underutilisation of resources.

���Airlines have cut capacity by about 17% in the first half of this fiscal. They are expected to return at least 20 more aircraft including B-777s to the lessors in the remaining period of this fiscal,��� said an industry watcher.

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